This study provides a first broad systematic treatment of the euagarics as they have recently emerged in phylogenetic systematics. The sample consists of 877 homobasidiomycete taxa and includes approximately one tenth (ca. 700 species) of the known number of species of gilled mushrooms that were traditionally classified in the order Agaricales. About 1000 nucleotide sequences at the 5′ end of the nuclear large ribosomal subunit gene (nLSU) were produced for each taxon. Phylogenetic analyses of nucleotide sequence data employed unequally weighted parsimony and bootstrap methods. Clades revealed by the analyses support the recognition of eight major groups of homobasidiomycetes that cut across traditional lines of classification, in agreement with other recent phylogenetic studies. Gilled fungi comprise the majority of species in the euagarics clade. However, the recognition of a monophyletic euagarics results in the exclusion from the clade of several groups of gilled fungi that have been traditionally classified in the Agaricales and necessitates the inclusion of several clavaroid, poroid, secotioid, gasteroid, and reduced forms that were traditionally classified in other basidiomycete orders. A total of 117 monophyletic groups (clades) of euagarics can be recognized on the basis on nLSU phylogeny. Though many clades correspond to traditional taxonomic groups, many do not. Newly discovered phylogenetic affinities include for instance relationships of the true puffballs (Lycoperdales) with Agaricaceae, of Panellus and the poroid fungi Dictyopanus and Favolaschia with Mycena, and of the reduced fungus Caripia with Gymnopus. Several clades are best supported by ecological, biochemical, or trophic habits rather than by morphological similarities.